What’s going on here?
Meta unveiled the latest version of its AI model on Wednesday, and it’s hoping this one – Muse Spark – will get its pricey AI engine firing on all cylinders.
What does this mean?
Muse Spark is the first major project from Meta’s rebuilt AI division since the company poured $14 billion into it, in a bid to match rivals OpenAI, Alphabet, and Anthropic. The model will be plugged right into all of Meta’s products, from Facebook to WhatsApp. Early reviews haven’t all been friendly – but investors nonetheless sent Meta’s stock up more than 9% by Thursday.
Mark Zuckerberg previously claimed that open source AI is the “world’s best shot” at making the tech useful, but Muse Spark’s training and code won’t be public. That’s a strategic shift: the social media company now seems to think that the way to make AI pay is by controlling – and charging for – access to its model.
Why should I care?
Zooming out: Hey, big spender.
We all know that Big Tech is spending big money on AI infrastructure – blowing as much as $675 billion on data centers, chips, and power this year alone. But they’ve struggled to figure out how to make AI wash its own face.
Now there’s evidence that revenues are picking up among some frontier AI companies. Anthropic is now on track to rake in $30 billion a year on Claude sales, OpenAI is set to pull in about $24 billion, and even the smaller firms are gathering steam. Perplexity, for example, is on pace to hit $450 million, a 50% jump from earlier this year.
This doesn’t mean that the economics have been worked out – companies are still burning through cash, and computing bills are still ginormous. But it does suggest AI demand may be turning into real revenue faster than skeptics predicted.
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